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Nigeria’s Aviation Sector Hits Turbulence

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Arik Airplane
  • Nigeria’s Aviation Sector Hits Turbulence

Nigeria may consider itself a regional aviation hub but years of mismanagement and now recession have blighted domestic airline operations, making delays and cancellations the norm.

Industry experts say the sector needs a fundamental overhaul, pointing to opaque management practices, rampant corruption and risks for passengers from security and dilapidated infrastructure.

Arik Air, which has a 60 percent share of domestic flights and is the country’s biggest private carrier, has found itself increasingly in the firing line of disgruntled passengers.

Earlier this month, irate passengers beat up one of its executives at Lagos international airport after the third consecutive cancellation of their flight to Johannesburg.

In December, Arik operations were grounded by a 24-hour strike by employees demanding the payment of seven months arrears in salary.

There was no response from Arik when asked to comment on the situation by AFP.

Other domestic operators are struggling. Aero Contractors, the second biggest carrier, stopped services for four months at the end of last year because of “serious financial difficulties”.

For John Ojikutu, an aviation security consultant, most Nigerian airlines run their businesses like a grocery store.

“They just want to make profit,” he told AFP.

The result is airlines in Nigeria generally have a short life span: in 35 years more than 40 operators have gone bust, including Nigeria Airways, which collapsed in 2003.

– Dollar shortage –

Ojikutu said the airlines are heavily in debt and “taking advantage” of the country.

“People are… operating without paying the fuel marketers, without paying their staff, without paying for the services they’re given (insurance, maintenance),” he said.

“If they are not making profit, the question is what do they really do with all this money?… They are selling tickets every day.

“As long as we don’t have a strong, credible, independent regulatory agency we cannot have a viable aviation industry in this country.”

In their defence, the airlines blame a lack of foreign currency that has left them unable to pay fuel suppliers or, in some cases, landing charges at airports outside Nigeria.

Nigeria is one of Africa’s main oil producers but is forced to export crude and import petroleum products because of a lack of domestic refining capacity.

The fall in the price of crude on international markets has seen the naira currency lose value against the dollar and Nigerian banks no longer have enough liquidity.

Foreign airlines such as United and Iberia have stopped flights to Nigeria because of difficulties in repatriating profits in dollars.

In September last year, members of the House of Representatives asked the government to declare a state of emergency in the aviation sector, saying 160,000 jobs were at risk.

Lawmakers also called for an investigation into the alleged misappropriation of 120 billion naira (357 million euros) of public funds in 2012 meant to modernise the sector.

– Airport closure –

Two years ago, the Nigerian state got on the board of several airlines, including Arik and Aero, through its Asset Management Corporation of Nigeria.

But according to Ojikutu, no serious audit has been carried out to evaluate the real financial situation of the companies.

“Funders and banks may have been too lenient in granting credit to Nigerian airlines for excessive expansion on the basis that somehow government (or AMCON) will step in to protect banks from failing due to non-performing loans to airlines,” added Joachim Vermooten, an expert in transport economics at the University Johannesburg.

Another major challenge is upgrading ageing infrastructure which cannot handle the millions of passengers who now travel every day through Nigerian airports.

From early March for example, the airport in Abuja will close for six weeks for major resurfacing work on the only runway serving the federal capital.

The runway, which was built in 1982 with a life span of 20 years, is now “completely gone” and “unsafe for operation”, according to the aviation minister Hadi Sirika.

“The entire structure of the runway has failed,” he has said.

Passengers for Abuja will have to land at Kaduna, some 200 kilometres to the north, and transit to the capital by bus on a road known for frequent kidnappings.

The airport closure is the talk of Abuja, underlining not just Nigeria’s reliance on air transport but the lack of a viable alternative.

AFP

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Air Passengers Drop as Domestic Airlines Resume Operations

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Number of Air Passengers Drop as Domestic Airlines Resume Operations

The number of air passengers dropped despite Governor Babajide Sanwo-Olu lifting the curfew imposed to address looting and destruction of properties in the state.

The busiest airport in the country, Murtala Mohammed Airport, resumed full operations on Monday, however, passengers are cautious about flying, especially because of the tense situation across the nation.

Some of the officials of the Federal Airports Authority of Nigeria as well as those of domestic airlines confirmed that domestic passenger volume had been on a slow start since they commenced full operations.

Okwudili Ezenwa, the spokesperson for Dana Air, said “We are hoping that by next week, everything should have settled down because right now, people are still trying to be sure of their movements.

“Passengers are being cautious before they come out. So, things have not balanced. People are not leaving Lagos as such from the airport now; rather, they are being careful.”

He added, “In locations where no curfew was announced, other places will still have to feed such locations. So since we have curfews here and there, ultimately it affects areas where we don’t have curfew.

“But we hope everything settles down well before next week.”

Similarly, Stanley Olisa, the spokesperson, Air Peace, explained that even though domestic flight operations had resumed, passengers were still wary of flying.

Yes domestic flights have resumed out of the Lagos airport but it is something that is only picking up gradually,” he said.

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333,000 Artisans: FG Commences One-Time Payment of N30,000

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FG Begins One-Time Payment of N30,000 to 333,000 Artisans

The Federal Government on Monday said it has commenced a one-time payment of N30,000 to 333,000 artisans under the Micro Small and Medium Enterprises (MSMEs) Survival Fund.

In a statement issued by Laolu Akande, the Senior Special Assistant to the President on Media and Publicity, Office of the Vice President, disbursements were being done to verified beneficiaries of the Artisan Support Scheme.

The statement read in part, “In the first stream of payments starting today, beneficiaries are being drawn from the FCT, Lagos, Ondo, Kaduna, Borno, Kano, Bauchi, Anambra, Abia, Rivers, Plateau and Delta States. They form the first batch of applications for the scheme submitted between October 1 and October 10.

“The MSMEs Survival Fund scheme is a component of the Nigerian Economic Sustainability Plan, NESP, which was developed by an Economic Sustainability Committee established by President Muhammadu Buhari in March 2020.

“The President asked his deputy, Vice President Yemi Osinbajo, SAN, to head the committee which produced and is overseeing the implementation of the plan. “Under the ESP, the Survival Fund is generally designed to among other things, support vulnerable MSMEs in meeting their different obligations and safeguard jobs in the sector.”

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Absorb Exited Npower Beneficiaries, N-power Youths Congress Tells FG

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Absorb Npower Beneficiaries of Batches A and B, N-power Youths Congress Tells FG

The N-power Youths Congress (NYC) has pleaded with the Federal Government to absorb the 500,000 exited Npower beneficiaries of Batches A and B and pay their outstanding allowances.

The National Coordinator, NYC, Comrade Joseph Enam Maga, stated this in Maiduguri during a press briefing held on Saturday at the NUJ Press Center.

He said thousands of exited beneficiaries are yet to be paid since the month of Match.

He, therefore, called on the Federal Government to offset all the outstanding allowances of Batches A and B and create a permanent job for them.

He said “It is a fact undisputable that thousands of beneficiaries have not been paid since the month of March.

“Promises upon promises have been made on this, but yet no positive result has been recorded. Sometimes I wonder what it takes for the data base manager of Npower to rectify this! Something that can be rectified in a couple of hours has lasted for seven good months now.

“Worst still, this is happening within this period of hunger and starvation because of Pandemic. We call on the minister of humanitarian affairs and disaster management to be human enough to respond to our request and give prompt attention to them.

“We equally wish to bring to the notice of Mr. President that Batch B Beneficiaries have not received their devices as was promised and signed at the commencement of the program.

“It is very sad that up to the disengagement of Batch A and B, nobody has come out openly to tell us what happened to our devices.

The coordinator paused to ask why are Nigerian youths being treated like nobody in their country? What have we done to be neglected like this?

“When the Humanitarian Minister was asked why we were disengaged at this critical time in historical epoch that corona virus is terrorizing the whole world, she responded that we were disengaged because it’s a two years programe that we signed.

“Then comes the question: why did Batch A stayed 4years? And if we signed for two years contract that warranted our disengagement, didn’t we equally signed to be given a device that would help us in our different places of primary assignment and equally increase of knowledge? Please we need answers ma. We need answers.

“We, the 500,000 batches A and B of Npower beneficiaries are calling on our government to respond to our demand. We don’t want to believe that it’s only a state of violence anarchy and doom will make a sane government to listen to her Youth’s grievances.

“Look at the Endsars protest for instance, after many lives have been lost and properties destroyed, our government decided to speak up. Niger delta militants were attended to when they resort to arms.

“The insurgents were given amnesty because of their terrorism. But we the innocent 500,000 graduates have been innocently complaining to our government but they paid deaf ears. We are law abiding citizens and we will continue to be law abiding citizens.

“We want Mr. President to understand that a hungry man is an angry man. We have really endured a lot. We need a quick response to our requests. We can’t be used and dumped like refuse. We refused to be used and dumped”, the National Coordinator added.

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